Alcoa (AA) AI Stock Analysis

• Market Cap: $8.01B
• Dividend Yield: 1.29%
• Average Volume (3M): 5.37M
• Price to Earnings (P/E): 7.9
• Beta (1Y): 1.81
• Revenue Growth: 21.32%
• EPS Growth: N/A
• Country: US
• Employees: 13,900
• Sector: Basic Materials
• Sector Strength: 61
• Industry: Aluminum
• EPS (TTM): 0.39
• Shares Outstanding: 258,914,730
• 10 Day Avg. Volume: 5,415,874
• 30 Day Avg. Volume: 5,368,238
• PEG Ratio: -1.24
• Price to Book (P/B): 1.56
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 191.08
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.67
• Enterprise Value/Gross Profit: 3.57
• Enterprise Value/Ebitda: 4.03
• 1Y Price Target: $33.89
• Price Target Upside: 4.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 73 Outperform
• Price Target: $36.00 ▲(11.49% Upside)

Alcoa's overall stock score reflects a strong financial recovery and attractive valuation, tempered by technical indicators suggesting potential overbought conditions and short-term pressures from increased costs and revenue decline. The company's strategic moves and long-term demand outlook provide a positive backdrop, but near-term challenges remain.

Positive Factors

Strong Operational Performance

Alcoa's strong operational performance, with no serious injuries and improved safety metrics, indicates effective management and operational efficiency, which are crucial for long-term sustainability and productivity.

Sale of Ma'aden Joint Ventures

The sale of the Ma'aden stake enhances Alcoa's liquidity and financial flexibility, allowing for strategic reinvestment and strengthening its balance sheet, which supports long-term growth and shareholder value.

Promising Long-term Aluminum Demand

Strong long-term demand for aluminum, driven by global trends in transportation, construction, and packaging, positions Alcoa well for sustained revenue growth and market leadership.

Negative Factors

Revenue Decline

A 10% sequential revenue decline, particularly in the Alumina segment, signals potential challenges in maintaining growth momentum, which could impact Alcoa's financial performance if not addressed.

Impact of Section 232 Tariffs

Rising tariff costs due to Section 232 tariffs on Canadian imports compress margins, posing a risk to profitability and necessitating strategic cost management to mitigate long-term impacts.

Decreased Net Income

A significant drop in net income highlights potential volatility in earnings, which could affect investor confidence and Alcoa's ability to invest in growth initiatives if not stabilized.

Alcoa Business Overview & Revenue Model

Company Description

Alcoa Corporation (NYSE: AA) is a global leader in the production of aluminum, operating across the entire aluminum value chain from mining and refining bauxite to manufacturing and recycling aluminum products. The company is primarily involved in the production of aluminum and alumina, with operations spanning several regions worldwide, including North America, South America, Europe, and Australia. Alcoa operates in various sectors such as aerospace, automotive, building and construction, commercial transportation, and packaging, providing a range of products including rolled and extruded aluminum, as well as engineered products and solutions.

How the Company Makes Money

Alcoa generates revenue primarily through the sale of aluminum and alumina, with its revenue model primarily based on the production and distribution of these core products. Key revenue streams include the sale of primary aluminum, alumina, and fabricated aluminum products, as well as aluminum recycling services. The company benefits from long-term contracts with major customers in the aerospace and automotive industries, which provide stable revenue sources. Additionally, Alcoa's operational efficiency and focus on cost management contribute to its profitability. The company also engages in strategic partnerships and joint ventures that enhance its market reach and operational capabilities, further contributing to its earnings.

Alcoa Financial Statement Overview

Summary

Alcoa's financial performance shows a strong recovery with improvements in profitability, leverage, and cash flow metrics. The company has managed to enhance margins and cash generation, although past volatility remains a risk.

Income Statement

Alcoa's income statement shows a strong recovery with a TTM revenue growth rate of 1.45% and significant improvements in profitability metrics. The gross profit margin increased to 18.70% in TTM, and the net profit margin rose to 7.66%, indicating enhanced operational efficiency. EBIT and EBITDA margins also improved, reflecting better cost management. However, the company experienced volatility in previous years, with negative net income in 2022 and 2023, which could pose a risk if not managed well.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.43 in TTM, showing a manageable level of leverage. The return on equity improved significantly to 17.96%, indicating effective use of equity to generate profits. The equity ratio is healthy, suggesting a solid capital structure. However, the company needs to maintain this trajectory to mitigate past fluctuations in equity returns.

Cash Flow

Alcoa's cash flow statement highlights robust growth in free cash flow, with a TTM growth rate of 67.24%. The operating cash flow to net income ratio is 0.34, indicating strong cash generation relative to net income. The free cash flow to net income ratio of 0.52 suggests efficient cash conversion. Despite past challenges, the recent improvements in cash flow metrics are promising for future liquidity and investment capacity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.10B	12.18B	10.71B	12.76B	12.44B	9.37B
Gross Profit	2.45B	1.50B	241.00M	1.93B	2.62B	765.00M
EBITDA	2.17B	1.09B	155.00M	1.43B	2.06B	972.00M
Net Income	1.00B	60.00M	-651.00M	-123.00M	429.00M	-170.00M
Balance Sheet
Total Assets	14.99B	14.06B	14.15B	14.76B	15.03B	14.86B
Cash, Cash Equivalents and Short-Term Investments	1.51B	1.14B	944.00M	1.36B	1.81B	1.61B
Total Debt	2.65B	2.82B	1.97B	1.87B	1.87B	2.62B
Total Liabilities	8.76B	8.91B	8.31B	8.17B	8.74B	9.84B
Stockholders Equity	6.13B	5.16B	4.25B	5.08B	4.67B	3.31B
Cash Flow
Free Cash Flow	582.00M	42.00M	-440.00M	342.00M	530.00M	41.00M
Operating Cash Flow	1.12B	622.00M	91.00M	822.00M	920.00M	394.00M
Investing Cash Flow	-567.00M	-608.00M	-585.00M	-495.00M	565.00M	-167.00M
Financing Cash Flow	-468.00M	201.00M	57.00M	-768.00M	-1.16B	514.00M

Alcoa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 32.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AA, the sentiment is Positive. The current price of 32.29 is above the 20-day moving average (MA) of 31.20, above the 50-day MA of 30.64, and above the 200-day MA of 32.11, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 58.13 is Neutral, neither overbought nor oversold. The STOCH value of 47.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AA.

Alcoa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AA	73 Outperform	$8.01B	7.93	20.01%	1.29%	21.32%	―
CMC	72 Outperform	$6.53B	187.95	0.88%	1.23%	-5.64%	-93.26%
HL	70 Outperform	$7.35B	70.10	4.67%	0.23%	36.30%	―
KALU	68 Neutral	$1.22B	19.40	8.89%	4.08%	4.62%	56.04%
CENX	66 Neutral	$2.03B	19.56	17.74%	―	15.39%	-47.91%
CSTM	64 Neutral	$2.02B	75.35	3.02%	―	2.52%	-83.35%
Sector *	61 Neutral	$10.29B	7.21	-0.05%	2.89%	2.87%	-36.73%

Alcoa Corporate Events

Alcoa Sells Stake in Ma’aden Joint Venture

On July 1, 2025, Alcoa Corporation announced the closing of its sale of a 25.1% ownership interest in the Ma’aden joint venture to Saudi Arabian Mining Company, receiving approximately $1.35 billion in shares and cash. This transaction allows Alcoa to record a gain of approximately $780 million in the third quarter of 2025 and reflects the company’s strategy to unlock shareholder value while maintaining a stake in Ma’aden for future financial visibility.